The Bureau of Labor Statistics (BLS) today reported a 3.2% unemployment rate for workers age 55 and older in February, an increase of 0.2 percentage points from January.
While low unemployment is finally leading to wage increases for some prime-age men, women and older workers are being left behind. In the last year, the gap between wage gains for prime-age men and older women was 8 percentage points, a loss of $4,000 a year for an older woman making $50,000 a year.
As last month’s Federal Reserve's Monetary Policy Report observed, “While the aggregate labor market appears to be modestly tight at the moment, not all individuals have benefited equally from these developments.”
Between January 2017 and January 2018, hourly earnings (adjusted for inflation) of men ages 25-54 grew by 4.4%, the highest year-to-year increase since the recession ended in 2009. Wages of older men ages 55-62 increased by 2.8%, while prime-age women's wages were stagnant and older women’s wages fell by 3.6%.
Stagnant wages for older workers and women increases wage gaps and make it harder to save for retirement. Stagnant wages are symptomatic of an “unfriendly” labor market. Older workers who lose their jobs face long periods of unemployment. If they find a new job, they typically face pay cuts of 20% or more.
Partly because traditional gender roles require women to interrupt their careers for unpaid care work and partly because of sex discrimination, women’s jobs are less secure, pay less, and are less conducive to accumulating retirement savings.
A stronger Social Security system and the creation of Guaranteed Retirement Accounts (GRAs) will allow all Americans a dignified retirement, including those affected by cumulative disadvantage in the labor market. GRAs are a proposal for universal individual accounts funded by employer and employee contributions and a refundable tax credit throughout a worker’s career.
*Arrows next to "Older Workers at a Glance" statistics reflect the change from the previous month's data for the U-3 and U-7 unemployment rate and the last quarter's data for the median real weekly earnings and low-paying jobs.